DeLay Pours It On for Bacardi

With help from House Majority Leader Tom DeLay (R-Texas), Bacardi-Martini Inc., the U.S. subsidiary of the Bermuda-based rum maker, is on the verge of scoring a big victory in the long-running battle over who owns the rights to the legendary “Havana Club” rum label, a victory that could prove very lucrative in a post-Fidel Castro world.

DeLay is lobbying to include language in the 2004 Defense authorization conference report to amend U.S. trademark law to make it comply with a ruling by the World Trade Organization last year that threatened Bacardi’s claim to the Havana Club brand.

Opponents of DeLay’s proposal point out that his measure was never vetted by any committee in either the House or the Senate, and benefits Bacardi alone, and they claim it could potentially harm U.S. companies that have intellectual or property claims in Cuba.

A liberal government watchdog group slammed DeLay for his action on behalf of Bacardi, alleging the Texas Republican is simply bailing out a big financial backer. Bacardi has given DeLay or organizations under his control more than $43,000 during the past several years, a portion of the $800,000-plus the company has spread around to both parties since 1997.

DeLay aides strongly dispute any link between his proposal and Bacardi’s donations and say the Texas Republican’s interest in the issue is purely ideological. They point out that DeLay wants to continue the U.S. embargo of Cuba as long as Castro is in power and argue the WTO ruling could give Cuban companies a chance to sell products in this country unless they are specifically blocked from doing so.

Jonathan Grella, DeLay’s spokesman, said his boss is “working in conjunction with U.S. Trade Representative Robert Zoellick” to bring American trademark law into compliance with the WTO ruling. USTR officials said they are now looking to Congress for help.

Grella cautioned that the legislative vehicle the Majority Leader will try to attach the Bacardi measure to is “not solid” yet, although Armed Services Chairman Duncan Hunter (R-Calif.) has apparently agreed to include it in the Defense bill, according to several sources close to the issue. The newsletter Cuba Trader first disclosed details of DeLay’s initiative.

Bacardi has been locked in a bitter struggle for years with Pernod Ricard of France and CubaExport, a Cuban government-controlled company, over control of the Havana Club trademark. In 1993, the French-Cuban alliance formed a joint venture to market Havana Club, which the Cuban government registered with the U.S. Patent Office in 1976. Bacardi was later able to convince American officials to back off from their recognition of the Cuban government’s claims.

Bacardi, which has opposed lifting the U.S. embargo of Cuba, fearing a flood of Cuban rum into the U.S. market, purchased the rights for Havana Club from the original owner, Jose Arechabala S.A., in the mid-1990s. The two sides have since waged a protracted contest on both the political and legal fronts.